Now, use this pie chart as a reference to answer the questions:
3
6
1
1
OBJECTIVES & STANDARDS
Math Objectives
Write a linear equation in slope-intercept form from a word problem
Solve a linear equation from a word problem
Common Core Math Standards
Personal Finance Objectives
Learn the advantages of pay yourself first, the 50/30/20 Rule, and other strategies to help meet savings goals
Realize that saving can be difficult when income is too small to cover necessities
National Standards for Personal Financial Education
Saving
9d: Explain how the saving strategy “pay yourself first” can help people achieve their saving goals
DISTRIBUTION & PLANNING
Distribute to students
OBJECTIVES & STANDARDS
Math Objectives
Write a linear equation in slope-intercept form from a word problem
Solve a linear equation from a word problem
Common Core Math Standards
Personal Finance Objectives
Learn the advantages of pay yourself first, the 50/30/20 Rule, and other strategies to help meet savings goals
Realize that saving can be difficult when income is too small to cover necessities
National Standards for Personal Financial Education
Saving
9d: Explain how the saving strategy “pay yourself first” can help people achieve their saving goals
DISTRIBUTION & PLANNING
Distribute to students
CALCULATE: Savings Goals
Let’s say you set a savings goal of $50 per month.
EDPUZZLE: Pay Yourself First
In the intro, we assumed you’d be able to save $50/month. But what strategies can you use to actually save that money? First and foremost, you should consider “paying yourself first.” Watch this video to learn more about the benefits of making your savings automatic. Then, answer the questions either in EdPuzzle or below.
Which strategy will help you save the most money?
A. Wait until the end of the month and any money that you have not spent, add it to your savings account.
B. On the last day of each month, deposit a fixed $10 to your savings account.
C. As soon as you receive your paycheck, put a fixed amount or percentage of your money directly into your savings.
D. Only deposit into your savings account when you have a large lump sum of money.
GRAPH: The 50/30/20 Budget Rule
Another strategy that helps quantify and encourage savings is the 50/30/20 method for budgeting, where 20% should go to saving and debt repayment.
First, picture yourself as a 25-year-old, living your best life. What types of items would future-you put in each of these three categories for the 50/30/20 Rule?
Now, use this pie chart as a reference to answer the questions:
INTERACTIVE: Income + Financial Stability in America
50% toward needs, 30% toward wants, 20% toward saving and debt repayment. That sounds easy, right? Anyone can pull that off, right? Here are a few examples of hypothetical but realistic families that would struggle with this strategy. Scroll through the interactive, reading as you go along, and then select one pathway in the “Take a look at a typical American” section and learn “How does this add up?”
Which household did you choose?
What would you recommend for a household that cannot make this 50/30/20 method work?
ACTIVITY: How to Save Money: 22 Proven Ways
In order to reach your savings goals, you need an achievable target and a plan for how to get there. 22 strategies are far too many for anyone to keep track of, so open this article and use the QUICK LINKS at the top to investigate THREE strategies from the list. Your teacher may have you work individually or in a group to complete the table below.
Which of the three strategies you just researched do you think would work best for you, personally? Explain why.
For each scenario, write a linear equation to model what’s happening, and then solve the equation to answer the question.
What do “paying yourself first” and “automating your savings” have in common?
They both require you to use online or mobile banking
They both focus on making sure you can afford necessities like housing and transportation
They both prioritize saving money before you have the opportunity to spend your entire paycheck
They both require you to make a middle class income before you become eligible to use them as your saving strategy
The 50/30/20 Rule suggests that you budget your money into___
50% savings, 30% needs, 20% wants
50% needs, 30% wants, 20% savings
50% needs, 30% debt repayment, 20% savings
50% wants, 30% savings, 20% needs
Most savings strategies focus on these two actions:
Spend less money and make saving a higher priority in your budget
Spend less money and change where you do your banking
Earn more income and donate more to charity
Keep a tight budget and eliminate fun temporarily
What is the benefit of automating your savings account contributions?
You can change the amount you deposit each month.
The fees are relatively small to enroll in this service.
Your money will be transferred automatically and guarantees you will be contributing to your savings.
Your employer will contribute additional money to your savings account if you enroll in this service.
What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.
